The Nicaraguan government assigned a high-ranking official to mediate between sugar workers and their employers on Monday after police killed a farmer during a weekend protest at a sugar mill.

Deputy Interior Minister Carlos Najar will present possible solutions to workers' demands next week, the government said.

Sugar workers have been protesting over the last fortnight to demand their employers pay for medical care for those who suffer from chronic kidney disease caused by exposure to chemical contamination in treated cane fields.

They also want compensation for the families of workers who died from kidney problems.

Police sent in to remove about 300 workers who had blocked the entrances to the San Antonio sugar mill fatally shot one and wounded another on Saturday.

Authorities said the officers involved in the shooting have been detained and were under investigation.

Officials insisted police fired their weapons only after being attacked by protesters.

Nicaragua's highest rates of chronic kidney disease show up around the Ingenio San Antonio plant in the town of Chichigalpa, owned by the Pellas Group conglomerate.

Sugar workers' leader Paulo Najera said the workers wanted to take to the streets again over the death of their colleague but most had agreed to wait for the government to try to find a solution.

"We are tired of being deceived," Mr Najera said.

"This time we want real solutions. There are people who want to use violence against the police, but we will wait."